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Remember the Pepsi Challenge? The iconic marketing campaign where people were invited to participate in a blind taste test, choosing their favorite between Coca-Cola and Pepsi? Well, we’re bringing that concept back, but with a twist. Instead of comparing the taste of these two beverage giants, we’re putting their stocks to the test as dividend investments.

We’ll call them “Beverage Stock A” and “Beverage Stock B” to keep things impartial. Let’s see how Coca-Cola Co (NYSE:KO) and PepsiCo Inc (NASDAQ:PEP) stack up against each other in terms of historical performance, dividend growth, current yield, dividend safety and analyst price targets.

Historical Performance

Over the past 10 years, Beverage Stock A has seen a price increase of 50.96%, while Beverage Stock B has more than doubled that with a 107.99% rise. When it comes to total return, which includes dividends, Stock A has delivered a respectable 107.7%, but Stock B has blown it out of the water with a 176.7% return.

Winner: Beverage Stock B

Current Yield

If you’re looking for the highest current income, Stock A has a slight edge with a 3.15% dividend yield, compared to Stock B’s 2.85%.

Winner: Beverage Stock A

Dividend Growth

Both stocks have a solid track record of increasing their dividends, but one has been more generous than the other. Stock A has a 10-year dividend growth rate (CAGR) of 5%, while Stock B has been growing its payout at an impressive 8.35% annually over the same period.

Winner: Beverage Stock B

Dividend Safety

To assess the safety of these dividends, we can look at the cash dividend payout ratio (TTM). Stock A is paying out 81.58% of its earnings as dividends, while Stock B has a payout ratio of 94.46%. While both ratios are on the high side, Stock A appears to have a bit more breathing room.

Winner: Beverage Stock A

Analyst Price Targets

Now, let’s see what the experts think about these two stocks. The latest analyst ratings for Stock A come from JP Morgan, Barclays, and Argus Research, with an average price target implying a 9.92% upside. Stock B’s most recent ratings are from Barclays, JP Morgan, and Wedbush, with an average price target suggesting a 6.49% upside.

Winner: Beverage Stock A

The Big Reveal

So, which of these iconic beverage companies do you think is the best dividend stock? Stock A or Stock B? Scroll down to leave a comment with your guess before reading on.

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Alright, time to reveal the truth. Beverage Stock A is none other than the iconic Coca-Cola, while Beverage Stock B is its longtime rival, PepsiCo.

Coca-Cola has always been the more popular soft drink, and it’s also been the more popular dividend stock, partly thanks to its status as one of Warren Buffett’s top holdings. In fact, Buffett’s Berkshire Hathaway owns a staggering 400 million shares of Coca-Cola, worth over $23.5 billion and generating $776 million in annual dividends.

This popularity is reflected in the trading volume as well. Coca-Cola’s 30-day average daily volume is 14.2 million shares, more than double PepsiCo’s 6.07 million.

But as the Pepsi Challenge has shown time and time again, popularity doesn’t always equate to preference. PepsiCo has outperformed Coca-Cola in terms of price appreciation, total return, and dividend growth over the past decade.

So, which stock is the winner for you? Just like in the Pepsi Challenge, the answer is a matter of personal preference. Some investors might prioritize current yield and dividend safety, favoring Coca-Cola. Others might be swayed by PepsiCo’s superior growth and total return.

In the end, both Coca-Cola and PepsiCo are solid dividend stocks with strong brands and loyal customer bases. The key is to choose the one that best aligns with your investment goals and risk tolerance.

Now, it’s time for the real challenge: deciding whether to buy a Coke or a Pepsi to enjoy while you ponder your next investment decision.

Looking for the Ultimate High Yield Investments?

If you’re intrigued by the idea of generating reliable passive income but want to explore opportunities beyond the stock market, consider these two alternative investment platforms:

Arrived Homes: This platform allows you to invest in rental properties for as little as $100, providing the potential for steady rental income and long-term appreciation without the hassles of being a landlord. With an average annualized dividend yield of 4.2% and the backing of notable investors like Amazon founder Jeff Bezos, Arrived Homes is worth exploring. Click here to explore available properties on the platform.

Cityfunds Yield Fund: The Cityfunds Yield fund offers investors a target annualized yield of 8% (with a guaranteed floor of 7%) by investing in a diversified pool of collateralized real estate loans. With quarterly distributions and a low minimum investment of $500, this fund provides an attractive option for income-focused investors looking to diversify their portfolios. Click here to learn more about the Yield fund or view other Cityfund offerings.

Both platforms offer unique opportunities to generate passive income through real estate investments, without the volatility often associated with the stock market.

Your taste buds might prefer Coke or Pepsi, but your investment portfolio could benefit from a refreshing real estate twist.

This article The New Pepsi Challenge: A Dividend Stock Showdown Between Coca-Cola and PepsiCo originally appeared on Benzinga.com

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